Analysis of transactions in the GBP / USD pair

A signal to sell emerged after GBP/USD hit 1.3567. However, there was no decrease because the MACD line being far from zero limited the downside potential of the pair. Fortunately, the second attempt was successful because by then, the indicator was in the oversold area and the market signal was to buy. That prompted a 30-pip increase in the pair.

The third attempt was also successful because the market signal was to sell, while the MACD line was below zero. The fall at that time was more than 20 pips.

Contrary to what was expected, UK's data on industrial orders, as well as the speech of Bank of England Deputy Governor David Ramsden, did not provoke a rally in pound yesterday. Meanwhile, US consumer confidence and PMI data in the manufacturing and services sectors increased demand for dollar, so GBP/USD went down in the afternoon.

A parliamentary hearing regarding the Bank of England monetary policy will take place today, followed by a speech from Bank of England Governor Andrew Bailey. A sharp tone against inflation may support pound in the morning, however, it is unlikely that it will be a sharp increase as tension is escalating in Ukraine. No statistics are planned for the afternoon, but the market will be closely watching the actions of the White House and the sanctions that the Joe Biden administration may resort to in response to the issue in Ukraine. In any case, the bullish trend in dollar has not gone away, so be careful when buying risky assets.

For long positions:

Buy pound when the quote reaches 1.3605 (green line on the chart) and take profit at the price of 1.3636 (thicker green line on the chart). A rally will occur if the upcoming speeches of Bank of England representatives show a hawkish stance on monetary policy.

But before buying, make sure that the MACD line is above zero, or is starting to rise from it. It is also possible to buy at 1.3582, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.3605 and 1.3636.

For short positions:

Sell pound when the quote reaches 1.3582 (red line on the chart) and take profit at the price of 1.3544. Pressure will return if data from the UK turn out weaker than expected, and if the Bank of England does not say hawkish statements on monetary policy.

But before selling, make sure that the MACD line is below zero, or is starting to move down from it. Pound can also be sold at 1.3605, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.3582 and 1.3544.

What's on the chart:

The thin green line is the key level at which you can place long positions in the GBP/USD pair.

The thick green line is the target price, since the quote is unlikely to move above this level.

The thin red line is the level at which you can place short positions in the GBP/USD pair.

The thick red line is the target price, since the quote is unlikely to move below this level.

MACD line - when entering the market, it is important to be guided by the overbought and oversold zones.

Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes.

And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decisions based on the current market situation is an inherently losing strategy for an intraday trader.